After making a big splash last week and injecting a sense of optimism into long-delayed coronavirus relief talks, a bipartisan $908 billion plan was hung up Monday over liability protections for businesses.

Sources familiar with the talks said the group of House and Senate lawmakers working on the text has a general agreement to distribute some $160 billion in state and local aid based on population size, revenue loss and expenditures, but negotiators were still finalizing the formula.

But the two issues are inextricably linked given the importance of state and local aid to Democrats and liability protections to Republicans, according to these sources. If there’s no deal to include liability, it becomes harder for Republicans to agree to keep state and local aid in.

The $908 billion plan is being eyed as the baseline for a new aid package lawmakers plan to attach to an omnibus fiscal 2021 spending bill. A one-week stopgap measure to buy more time to write the massive package is on tap this week, with the House planning to vote on the stopgap Wednesday.

That new deadline gives the bipartisan group more time to iron out its aid proposal, which won high-level support last week. But the legislative text will reveal whether it can pass both chambers or require further negotiation.

President-elect Joe Biden endorsed the framework with little equivocation. Speaker Nancy Pelosi and Senate Minority Leader Charles E. Schumer said it could use “improvements,” including more money for state and local governments.

Senate Majority Leader Mitch McConnell is pushing his own $500 billion-plus version, though he’s said he’s willing to negotiate. Other GOP senators have since said they could back the bipartisan Problem Solvers plan, depending on details.

President Donald Trump hasn’t expressed a view but said Saturday in Georgia that “I like the higher number rather than the lower number.”

On Monday, Trump’s top economic adviser Larry Kudlow told a “Washington Post Live” event, “I believe it is likely he will” sign a version of the bipartisan package. But he added: “It depends, importantly, on some of the policy details inside.”

Liability shield

Senate Republicans, business groups and the White House have insisted for months that any new aid bill include a liability shield if employers follow basic federal health safety guidelines. Democrats have resisted the effort, saying workers are putting their lives on the line in some cases and deserve the option of a court remedy if they get sick.

The bipartisan framework called for a “short-term” liability shield “with the purpose of giving states time to develop their own response,” according to a summary of the plan’s major provisions. But some GOP senators who were generally sympathetic to the larger package balked at that description; Thom Tillis of North Carolina, for instance, said he wanted something of “enduring value.”

The bipartisan group’s discussions have focused on a temporary moratorium on coronavirus-related lawsuits, but they disagree on what liability protections, if any, should come after the moratorium.

House Majority Leader Steny H. Hoyer said a lawsuit moratorium could be reasonable, however. “Obviously, we don’t want to change the rules of the game in terms of how people are compensated for wrongdoing of others,” the Maryland Democrat told MSNBC on Friday. “But if it’s just a moratorium, that’s possibly something we could consider in my view.”

State and local governments

The overall aid plan attempts to find a middle ground on coronavirus relief between the roughly $500 billion pushed by Senate Republicans and $2.4 trillion backed by House Democrats. The package would provide $180 billion for unemployment benefits, $288 billion for small businesses and $160 billion in aid to state and local governments, among other things.

The group initially ran into some trouble with Congressional Budget Office scoring of their four-month unemployment benefits proposal, which they intended to be retroactive to Dec. 1.

The latest plan under discussion would provide $300 per week in federal benefits on top of state benefits from Jan. 1 through April, according to one of the sources involved. Provisions set to expire at the end of the year that provide unemployment benefits for gig workers and those who’ve exhausted their state benefits would also be extended through April.

On state and local assistance, there’s general agreement on a funding formula but the details aren’t completely worked out, according to a source involved in the talks.

Rep. Tom Reed, R-N.Y., has said the group negotiating the package wants to ensure that communities that didn’t receive an adequate slice of an initial $150 billion aid round in March are compensated this time.

The March law set a 500,000 minimum population threshold for units of local government to receive pieces of their states’ allocations. Smaller cities and towns could receive some funding if they were part of larger counties, for example, but the lack of direct aid created bottlenecks that local officials said were unfair and sometimes cut them out completely.

Some Republicans seem more amenable than others to state and local relief, but only if paired with business liability protections.

“I think [McConnell] had made clear that state and local money is tied to liability protection, so there’s either going to be none for both of those, or both of those are going to be provided for,” Texas Sen. John Cornyn said. “My hope is we’ll do both.”

The bipartisan group is not discussing direct payments to households, similar to the $1,200 rebates that went out under the March aid package.

But lawmakers from left and right, including Sens. Josh Hawley, R-Mo., and Bernie Sanders, I-Vt., say the cash payments need to be included. Hawley told reporters Monday he’d oppose any relief package without the money and said he’s urged Trump to veto the measure if the provision is left out.

Offers and counteroffers

Meanwhile, talks on the broader year-end package continued over the weekend, as the two parties traded offers and counteroffers. The latest ball is in Republicans’ court, reviewing an offer Democrats sent over Sunday night, according to sources familiar with the discussions.

Current stopgap funding is set to run dry Friday. But congressional leaders plan to introduce another stopgap that would extend funding until Dec. 18.

Among the unresolved issues were the Trump administration’s $2 billion request for border wall construction and how to account for about $12.5 billion in veterans’ health care spending, mostly to help them receive treatment in urgent care and other private clinics outside of the VA system.

Democrats and Senate Republicans want to exempt the veterans’ money from statutory spending limits to free up more funding for other nondefense programs. But House Minority Leader Kevin McCarthy has opposed the exemption, and the White House has expressed concerns about it.

Sen. Jeanne Shaheen, D-N.H., said appropriators were still working out a dispute over police funding restrictions, which had been kicked up to committee leaders to decide.

Negotiators were also hoping to attach tax provisions to the omnibus measure. Those could include making business expenses deductible even if they are financed through the Paycheck Protection Program, which provides forgivable loans. They could also include changes to the employee retention tax credit and the extension of various expiring tax breaks, according to a source familiar with the talks.

And a rescue package for faltering union pension plans was also under discussion, according to House Ways and Means Chairman Richard E. Neal, D-Mass.

Paul M. Krawzak, Niels Lesniewski and Michael Macagnone contributed to this report.